When Does the Price Affect the Taste? Results from a Wine Experiment

SSE/EFI Working Paper Series in Economics and Finance No. 717

16 Pages Posted: 20 Apr 2009 Last revised: 3 Mar 2010

See all articles by Johan Almenberg

Johan Almenberg

affiliation not provided to SSRN

Anna Dreber

Stockholm School of Economics - Department of Economics

Date Written: March 2, 2010

Abstract

We designed an experiment that examines how knowledge about the price of a good, and the time at which the information is received, affects how the good is experienced. The good in question was wine, and the price was either high or low. Our results suggest that hosts offering wine to guests can safely reveal the price: much is gained if the wine is expensive, and little is lost if it is cheap. Disclosing the high price before tasting the wine produces considerably higher ratings, although only from women. Disclosing the low price, by contrast, does not result in lower ratings. Our finding supports the notion that price not only serves to clear markets, it also serves as a marketing tool; it influences expectations that in turn shape a consumer’s experience. In addition, our results suggest that men and women respond differently to attribute information concerning wine.

Keywords: Price-Quality Heuristic, Attribute Information, Role of Expectations, Marketing, Blind Tasting, Wine

JEL Classification: C91, D03, D83, M31

Suggested Citation

Almenberg, Johan and Dreber, Anna, When Does the Price Affect the Taste? Results from a Wine Experiment (March 2, 2010). SSE/EFI Working Paper Series in Economics and Finance No. 717. Available at SSRN: https://ssrn.com/abstract=1392208 or http://dx.doi.org/10.2139/ssrn.1392208

Johan Almenberg (Contact Author)

affiliation not provided to SSRN

Anna Dreber

Stockholm School of Economics - Department of Economics ( email )

P.O. Box 6501
Sveavagen 65
S-113 83 Stockholm
Sweden

Register to save articles to
your library

Register

Paper statistics

Downloads
467
Abstract Views
2,360
rank
61,833
PlumX Metrics